Oversales Signs

Federal RegisterJun 3, 1996

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 250

[Docket No. OST-96-1255 Notice 96-7]

RIN 2105-AC45

Oversales Signs

AGENCY: Office of the Secretary, DOT.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department proposes to eliminate a consumer notice about

airline oversales that is required to appear on signs at airports, city

ticket offices, and travel agencies, on the basis that the information

will continue to be

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available through other means. This action is taken on the Department's

initiative, as a result of the President's Regulatory Reinvention

Initiative.

DATES: Comments on the issues discussed in this document should be

received by July 18, 1996. Late-filed comments will be considered to

the extent practicable.

ADDRESSES: Comments should be sent to Docket Clerk, Docket No. OST-96-

1255, Room PL-401, Department of Transportation, 400 Seventh Street SW,

Washington, DC 20590. For the convenience of persons who will be

reviewing the docket, it is requested that commenters provide an

original and three copies of their comments. Comments can be inspected

from 10:00 a.m. to 5:00 p.m. at the address listed for mailing

comments. Commenters who wish the receipt of their comments to be

acknowledged should include a stamped, self-addressed postcard with

their comments. The docket clerk will date-stamp the postcard and mail

it to the commenter. Comments should be on 8\1/2\ by 11 inch white

paper using dark ink and should be without tabs and unbound.

An electronic version of this notice of proposed rulemaking will be

available at http://www.dot.gov/dotinfo/general/rules/aviation.html

shortly after publication in the Federal Register.

FOR FURTHER INFORMATION CONTACT: Tim Kelly, Aviation Consumer

Protection Division, Office of Aviation Enforcement and Proceedings,

Office of the General Counsel, Department of Transportation, 400

Seventh Street SW, Room 4107, Washington, DC 20590, telephone (202)

366-5952.

SUPPLEMENTARY INFORMATION: Airlines overbook (accept more reservations

than there are seats on a flight) in order to compensate for ``no

shows'' (passengers with confirmed reservations who do not show up for

their flight and do not cancel their reservation). Overbooking fills

seats that would otherwise go empty, thus keeping load factors up and

fares down. It also allows more passengers to obtain reservations on

the flight of their choice.

The Department of Transportation (Department or DOT) allows

overbooking but regulates it; see 14 CFR Part 250. Section 250.11(a) of

this regulation requires U.S. and foreign air carriers and travel

agencies to display a notice about overbooking at every desk or

position in the United States where tickets are sold. (The original

document adopting this rule can be found at 42 FR 12422, March 4,

1977.) The notice must be in boldface type at least one-fourth of an

inch high, and must read as follows:

Notice--Overbooking of Flights

Airline flights may be overbooked, and there is a slight chance

that a seat will not be available on a flight for which a person has

a confirmed reservation. If the flight is overbooked, no one will be

denied a seat until airline personnel first ask for volunteers

willing to give up their reservation in exchange for a payment of

the airline's choosing. If there are not enough volunteers the

airline will deny boarding to other persons in accordance with its

particular boarding priority. With few exceptions persons denied

boarding involuntarily are entitled to compensation. The complete

rules for the payment of compensation and each airline's boarding

priorities are available at all airport ticket counters and boarding

locations. Some airlines do not apply these consumer protections to

travel from some foreign countries, although other consumer

protections may be available. Check with your airline or your travel

agent.

The oversale protections of Part 250 do not apply to inbound

international flights to the United States. Section 250.11(e) states

that any U.S. or foreign air carrier that chooses to fully comply with

Part 250 on inbound international flights to the United States need not

use the last two sentences of the above Sec. 250.11(a) notice.

In his Regulatory Reinvention Initiative Memorandum of March 4,

1995, President Clinton directed Federal agencies to conduct a page-by-

page review of all of their regulations and to ``eliminate or revise

those that are outdated or otherwise in need of reform.'' In response

to that directive, the Department has undertaken a review of its

aviation economic and consumer regulations as contained in 14 CFR

Chapter II. This rulemaking is one result of those efforts. Other

rulemakings will address other regulations.

Section 250.11(b) requires that the text of the oversales sign also

appear on a notice that must accompany every ticket, and we plan to

leave this ticket notice requirement in place. The Department has

tentatively decided that it is no longer necessary to require this

notice both on signs and in tickets, and consequently we are proposing

to eliminate the requirement for the oversales sign for carriers and

travel agencies that provide the ticket notice. Most carriers that

offer ``ticketless'' transportation send passengers a copy of the

consumer notices required by DOT rules, including the Sec. 250.11(b)

notice.1 Where a carrier does not provide this notice in writing

to each customer, however, the notice would have to continue to appear

on signs at locations where that carrier sells tickets, e.g. airports

and city ticket offices.

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\1\ On January 19, 1996, the Department published a Federal

applied to ticketless travel. See 61 FR 1309; also available on the

World Wide Web at http://www.dot.gov/dotinfo/general/rules/

aviation.html. The comment period for that Notice ended March 19,

1996. After examining the comments in that proceeding, the

Department will determine, among other things, whether ``ticket'' in

the context of currently required ticket notices would include air

transportation sold without a conventional paper ticket and,

consequently, whether the existing rules require ticketless sales to

be accompanied by the passenger notices that are currently required

to be included on or with tickets.

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We have decided to propose elimination of the sign rather than the

ticket notice because the ticket notice is normally provided earlier in

the process, and it is a record that the passenger can retain. At

airports, the oversales sign is sometimes placed in locations where it

is difficult to read. In addition, there have been occasional

objections from airports over the placement of required signage.

Eliminating the requirement for the sign should be particularly

beneficial to the more than 45,000 travel agencies in the United

States, many of whom are small businesses.

This revision should not impair consumer protection. Air travelers

will continue to receive the same information via ticket notices. In

addition, Sec. 250.9 requires carriers to give a lengthier written

handout to anyone who is actually denied boarding, and to anyone else

who requests this handout. (The ticket notice makes reference to this

handout.) Finally, the substantive consumer protections of Part 250

continue to apply even where specific passengers might not receive

notice about those protections. In other words, during an oversale

situation, carriers are under an affirmative obligation to solicit

volunteers and pay compensation to all eligible passengers who are

denied boarding involuntarily, not simply those who request these

services as a result of reading a notice.

As indicated above, the ticket notice requirement in Sec. 250.11(b)

is being retained. The text of the ticket notice is not contained in

current Sec. 250.11(b); instead, because the text of the ticket notice

and the sign is identical, current Sec. 250.11(b) (the ticket notice

provision) incorporates the notice text by reference to the text in

Sec. 250.11(a) (the sign provision). Because Sec. 250.11(a) is being

eliminated, we are proposing to move the text of the ticket notice to

Sec. 250.11(b). We are also proposing to change the word ``notices'' in

the first sentence of current Sec. 250.11(b) to ``notice''; the

singular form is more accurate and is the form used in the remainder of

current Sec. 250.11(b). Finally, we are proposing to remove the word

``station'' from the phrase ``desk,

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station or position'' in current Sec. 250.11(a) (proposed

Sec. 250.11(b)) because it is confusing. This provision refers to an

individual staffed counter position, whereas the airlines use

``station'' to refer to a carrier's entire operation at a particular

city.

We are also taking this opportunity to propose changes to certain

outdated language in Part 250. We are proposing to change references to

the Civil Aeronautics Board, our predecessor in aviation economic

regulation, to the Department of Transportation. Citations to sections

of the Federal Aviation Act shall be changed to reflect the current

section numbers of these statutory provisions in the United States

Code, as a result of a 1994 recodification which absorbed that Act

directly into the U.S. Code and renumbered its sections. A statutory

change that occurred at the time of this recodification incorporated

``overseas air transportation'' into ``interstate air transportation''

and eliminated the former term, and we are proposing to make

corresponding changes to the term ``overseas air transportation''

wherever it occurs in Part 250.

Regulatory Analyses and Notices

This NPRM is considered to be a non-significant rulemaking under

DOT's regulatory policies and procedures, 44 FR 11034. The NPRM was not

subject to review by the Office of Information and Regulatory Affairs

pursuant to Executive Order 12866.

The proposal would have minimal economic impact, and accordingly no

regulatory evaluation has been prepared. The principal impact will be

that several dozen air carriers and more than 45,000 travel agencies,

many of whom are small businesses, will no longer have to display this

sign. The economic impact is difficult to quantify. There has been no

continuing direct cost associated with display of the signs, and thus

elimination of this requirement will not produce an immediate monetary

savings. Some carriers may choose not to incur the labor cost of

removing signs, particularly since the information on the sign is still

accurate. The major economic benefit will result from the fact that

this sign will not have to be erected at future airline and travel

agency locations. That will bring about both material and labor

savings.

The NPRM has been analyzed in accordance with the principles and

criteria contained in Executive Order 12612, and it has been determined

that it does not have sufficient federalism implications to warrant the

preparation of a Federalism Assessment.

While the proposal would benefit a large number of small

businesses, I certify that the proposal, if adopted, would not have a

significant economic impact on a substantial number of small entities.

List of Subjects in 14 CFR Part 250

Air carriers, Consumer protection.

For the reasons set forth above, the Department proposes to amend

title 14, chapter II, subchapter A, part 250 as follows:

PART 250--[AMENDED]

1. The authority citation for part 250 would continue to read as

follows:

Authority: 49 U.S.C. chapters 401, 411, 413, 417.

2. In Sec. 250.1, revise the definition of ``Carrier'' to read as

follows:

Sec. 250.1 Definitions.

* * * * *

Carrier means

(1) A direct air carrier, except a helicopter operator, holding a

certificate issued by the Department of Transportation pursuant to 49

U.S.C. 41102 (formerly sections 401(d)(1), 401(d)(2), 401(d)(5) and

401(d)(8) of the Federal Aviation Act of 1958), or an exemption from 49

U.S.C. 41101 (formerly section 401(a) of the Act), authorizing the

transportation of persons, or

(2) A foreign route air carrier holding a permit issued by the

Department pursuant to 49 U.S.C. 41301 through 41306 (formerly section

402 of the Act), or an exemption from the appropriate provision of 49

U.S.C. 41301 through 41306, authorizing the scheduled foreign air

transportation of persons.

Sec. 250.2 [Amended]

* * * * *

3. In Sec. 250.2, remove the words ``or overseas.''

Sec. 250.2 [Amended]

4. In Sec. 250.2b(b), remove the word ``Board'' in the last

sentence and add in its place ``DOT.''

Sec. 250.4 [Amended]

5. In Sec. 250.4(c), remove ``the Board'' and add in its place

``DOT.''

Sec. 250.5 [Amended]

6. In Sec. 250.5(a), remove the words ``and overseas'' in the last

sentence.

Sec. 250.9 [Amended]

7. In Sec. 250.9(b), in the subsection entitled Compensation for

Denied Boarding, remove the phrase ``Civil Aeronautics Board'' and add

in its place ``Department of Transportation.''

Sec. 250.9 [Amended]

8. In Sec. 250.9(b), in the subsection entitled Amount of Denied

Boarding Compensation, remove ``the CAB'' and add in its place ``DOT.''

Sec. 250.11 [Amended]

9. Section 250.11(a) is removed and reserved.

10. Paragraph (b) of Sec. 250.11 is revised to read as follows:

Sec. 250.11 Public disclosure of deliberate overbooking and boarding

procedures.

* * * * *

(b) Every carrier shall include with each ticket sold in the United

States the following notice, printed in at least 12-point type. The

notice may be printed on a separate piece of paper, on the ticket

stock, or on the ticket envelope. The last two sentences of the notice

shall be printed in a typeface contrasting with that of the rest of the

notice.